Ichimoku Cloud – What It Is & How to Trade It

Ichimoku Cloud – What It Is & How to Trade It

What is the Ichimoku Cloud?

The Ichimoku Cloud is a multi-functional indicator that helps traders determine trend direction, momentum, and support/resistance. It consists of five components:

1. Tenkan-sen (Conversion Line) = (9-period High + 9-period Low) / 2
2. Kijun-sen (Base Line) = (26-period High + 26-period Low) / 2
3. Senkou Span A (Leading Span A) = (Tenkan-sen + Kijun-sen) / 2
4. Senkou Span B (Leading Span B) = (52-period High + 52-period Low) / 2
5. Chikou Span (Lagging Line) = Current closing price plotted 26 periods back

How to Use Ichimoku in Forex Trading

• Bullish Signal: Price above the Cloud & Cloud is green.
• Bearish Signal: Price below the Cloud & Cloud is red.

Final Thoughts

The Ichimoku Cloud is an all-in-one indicator that provides trend, momentum, and support/resistance signals in a single tool. It’s great for traders who want a comprehensive trading strategy. 🚀